Financial ratios are used for all the following purposes except:

Question

Quizplus · Accepted Answer

Financial ratios are not used by taxation authorities to determine the amount of tax payable. Rather, taxation authorities rely on financial statements and tax laws to determine the amount of tax owed by a company. Financial ratios are primarily used by creditors, shareholders, and management for various purposes such as monitoring liquidity, assessing profitability, and planning and control.

Financial Ratios Are Used for All the Following Purposes Except